Credit-card ID group CPP makes lifesaving deal with watchdog

Credit card and identity theft protection group CPP has reached a deal with the FSA over mis-selling policies which could stop it going under.

But its shares remain suspended, it will not pay a dividend and could still face a substantial fine from the regulator.

CPP was forced to suspend dealing in its a shares on Monday and warned then that the FSA's requirements were "disproportionate and threatened the viability of the business".

Today it said it had agreed a deal with the FSA which will make it review past sales and alter the way it renews policies in the future. The past business review including likely compensation for customers who were victims of mis-selling will cost between £10 million and £15 million.

In future, existing customers will be given 60 days rather than 14 days to cancel their policies and will receive an extra letter from CPP reminding them that they can opt out half way through that period. The FSA had criticised CPP's automatic renewal system for giving consumers too little time to cancel policies.

CPP chief executive Paul Stobart said: "It's been a tough week but I am very pleased with where we have got to. I am very impressed by the way the FSA has handled this. But we still need to talk to our lending banks and to our business partners in the financial services industry."